TaxTMI 
TaxTMI 
2026 (2) TMI 1055
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.... & scheme of the Act it be held that the disallowance of deduction claimed under section 54F of the Act amounting to Rs. 91,45,450/- is not in accordance with the provisions of the Act. The disallowance so made be deleted. Just & proper relief be granted. 3. The Appellant prays to be allowed to add, amend, modify, rectify, delete, and raise any grounds of appeal at the time of hearing." 3. Facts of the case, in brief, are that the assessee is an individual and has furnished his return of income on 23.01.2015 declaring an income of Rs. 17,18,490/-. The case was selected for scrutiny through CASS. Subsequently, notices u/s 143(2) and 142(1) respectively were issued to the assessee. The Assessing Officer found that the assessee has sold an immovable property being a plot of land for Rs. 3,21,00,000/- on 18.03.2014 and purchased a flat on 25.02.2015 for Rs. 4 crores & claimed deduction u/s 54F of the IT Act. However, the assessee failed to deposit whole of the consideration into specified capital gain account scheme before furnishing return of income and only deposited Rs. 2,25,00,000/- in the specified bank account. Therefore, the Assessing Officer calculated capital gain ....
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....ataka) and also relied on various decisions passed by coordinate benches of this Tribunal wherein deduction u/s 54F was allowed to the assessee under identical facts. In this regard, we find that Hon'ble Karnataka High Court dismissed the appeal filed by the Revenue and confirmed the order passed by the Tribunal wherein deduction u/s 54F of the IT Act was allowed to the assessee even in the absence of depositing the whole of the consideration in specified capital gain account scheme by observing as under :- "4. Re. Point No. 1 Section 54(F) deals with capital gains on transfer of certain capital assets not to be charged in case, of investment on house. It reads as under 54F. Capital gain on transfer of certain capital assets not to be charged income of investment in residential house.- (1) [Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or [two ....
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....ovided in clause (a), or, as the case may be, clause (b), of subsection (1), shall be deemed to be income chargeable under the head "Capital gains" relating to longterm capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred. (4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under.." section 139, shall be ....
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....opriated by the assessee towards the purchase of the new asset made within one year before the date on which transfer of the original asset took place or which is not utilized by him for the purchase or construction of the new asset before the date of furnishing the return of income under Section 139 of the Act shall be deposited by him before furnishing such return in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under Section 139(1) of the Act in an account in any such bank or institution as specified and utilized in accordance with any scheme which the Central Government may, by notification in the official gazette framed in this behalf. Sub-section (4) is attracted only to a case where the sale consideration is not utilized either for purchase or for construction of a residential house. It has no application to a case where the assessee invests the sale consideration derived from the transfer either in purchasing the property or constructing the residential house within the period stipulated in Section 54F(1). The proviso to Section 54F puts an embargo on the application of Section 54F to cases which are....